On a daily basis, we are often asked by clients whether no invoices must not be recorded in the accounts, and if they are recorded in the accounts, will they all be adjusted for tax purposes? Questions such as these are mainly based on the relevant provisions of the Announcement of the State Administration of Taxation on the Issuance of Measures for the Administration of EIT Pre-tax Deduction Vouchers (State Administration of Taxation Announcement No. 28 of 2018).

Q:	Are expenses that are not taxable items deductible before tax without invoices?
A:	According to Article 10: "……If the counterparty is an individual, the internal voucher shall be used as proof of pre-tax deduction. "
Q:	Are unbilled small incidental expenses deductible before tax?
A:	According to the provisions of Article 9: "If the other party is an entity not required to register for taxation according to law or an individual engaged in small-scale and sporadic business, its expenditure shall be supported by invoices or receipts issued by the tax authorities and internal vouchers as proof of pre-tax deduction, and the receipts shall contain the name of the recipient entity, the name and identity card number of the individual, the item of expenditure, the amount received and other relevant information. "
Q:	How do I deduct any invoices not obtained during the year?
A:	If an enterprise can provide valid evidence of the relevant expenditure before the annual remittance of enterprise income tax, the expenditure can be charged to enterprise income tax. If an enterprise obtains invoices for expenses that have not been deducted before tax in previous years, the enterprise is allowed to make retroactive deductions to the year in which the item was incurred after making a special declaration and explanation, provided that the period of retroactive recognition does not exceed five years.
Q:	What is the pre-tax deduction for invoices that cannot be replaced or exchanged?
A:	If, in the process of issuing or exchanging invoices or other external vouchers, an enterprise is unable to do so for special reasons such as the other party's cancellation, revocation, revocation of business licence in accordance with the law, or being recognized by the tax authorities as a non-regular household, its expenditure may be allowed as a pre-tax deduction after the authenticity of the expenditure is confirmed with the following information. Supporting information on the reasons for not being able to issue replacement or exchange invoices or other external vouchers (including supporting information on industrial and commercial cancellation, withdrawal of institutions, inclusion in irregular business accounts, bankruptcy announcements, etc.) Contracts or agreements for relevant business activities. Payment vouchers for payment by non-cash means Supporting information for the transportation of goods Internal vouchers for the entry and exit of goods from the warehouse Accounting records of the enterprise and other information.
Q:	How can I deduct shared expenses for tax purposes without an invoice?
A:	For example, if the costs of water, electricity, gas, cooling, heating, communication lines, cable TV, network, etc. are incurred for shared production premises, office and other assets, enterprises will use the invoices as pre-tax deduction evidence if the lessor issues invoices as taxable items; if the lessor adopts the apportionment method, enterprises will use other external documents issued by the lessor as pre-tax deduction evidence.